Hi, my name is Johann Groenewald.
I am 47 and have been operating my own business for about 12 years. Before that I worked corporate and incubated the business on the side. Starting the business was a calculated risk and a passion. It was the second time in my life that my dad pulled me to the side and had a bit of father-to-son-are-sure-about-this talk. My first child was 1year old and my wife pregnant with our second daughter. I cashed in my pension (all R250k of it), sold our second property (which was actually doing very well as an investment but we were lucky with the property boom after the very high interest rates of around 2000).
I read somewhere here that a second property is like a job. I agree with that statement and I am a compulsive DIYer who like to build things so I go for old places and fix them up. But its true that you need to spend time on them. I have now reached a point where I have that time.
Anyhow, the first five years of our business was cut throat, I took home just enough to pay my bond and keep the family going. Some months I had to take money from my bond and boost the cashflow of the business. But the last three or four years a few things started to fall in place and the overnight success that took 15 years to build was mine. But then I realised that I have no savings and no pension. I also know that our business will not sustain these profitability for ever so I need to act now.
So here I am after about three years of dedicated savings and burning my fingers with Steinhoff and others I am trying to streamline my savings plan, hoping to achieve financial freedom over the next decade.
Because I own my company I decided to buy a office building last year and put my company in there. The way I see it our company would need to pay rent for the next 10years, so why not pay it to myself. I took on a 60% bond over 10years and the rental income is covering the bond and other costs. I also have the advantage of refurbishing the inside of the property on the company account since the tenant is responsible for certain things. So there is that and I thought it is just too big an opportunity to pass up. I am now also on much better terms with the landlord
I say again that I love building things myself and happy to take on the role of landlord.
I also own my house that our family live in and it needs to be paid off in the next two years.
I also have my 6month umbrella fund in place. I forced myself into a Allan Gray equity fund debit order and will probably stop funding this in the next few months. Our family will be able to sustain ourselves on this for about a year in reality. I know the costs issue but at the time forcing myself to save was more important than how I was saving. I did the same inside our company and proud to say that our accountant has now made peace with the monthly debit order. The fund is there for a rainy day but I hope to keep it protected for as long as I can and pay it out when I wind up my affairs in about a decade.
Then I have some shares which is now heavily weighted towards Naspers. I want to take up their exit to Euronext later this year to effectively move these shares into Euro zone. Not sure what the impact is on my estate and taxes and also not sure what kind of stockbroker arrangement is required - any tips would be appreciated. I am currently using ABSA stockbroker account for my JSE dealings and quite happy with it. Their WorldTrader account has an annual percentage fee, so I am not going to use that. I have slowly started to convert my collection of other shares to ETF's on the JSE and as soon as one goes into the green I sell it to buy ETF's. I am buying S&P500, Nasdaq and World tracker funds, following some tip I read on One Lap. I will probably sell my Steinhoff shares to offset the capital gains which would be triggered with the Naspers transaction.
With the knocks I took getting off the ground I am now sold on the idea of owning only or at least mostly ETF's, but I want to start saving in Euro or GBP.
I am very keen to learn more about how to open a broker account in Europe. Which country do you pick? Which brokerage is safe to use, min costs etc. Do you actually need a bank account in Europe to have a broker account, or can you simply fund it from SA Rand account? I plan to buy on a monthly basis and hope to have some dividends from our business from time to time. Essentially my strategy is to offset my heavy exposure to private equity (my business which I value at zero in my savings calc) as well as my property investment in SA. If all goes well with our sunshine country I hope to earn a steady rental income from our commercial property and possibly sell my house when my kids leave school and move to the countryside where cost of living is much cheaper.
The future for our kids is really unpredictable. The world is now so connected and 'small' that they could potentially end up anywhere in the world. While I do not intend following them around the globe I do want the freedom to travel, so rand hedge is very important for me.
Sorry for the long post, but there you have it. Hope to learn from you all.
Kind Regards
Johann
